Cigna To Break Even For Third Quarter

Company Cites Net Charge From Property-casualty Business

CIGNA Corp. said Friday it expects to break even for the third quarter, excluding investment gains, because of a net $105 million charge stemming from property-casualty business.

The company reported net income of $123 million, or $1.72 a share, in the third quarter of 1991.

News of the after-tax charge, equivalent to $1.46 a share, wasn't surprising, because CIGNA previously had announced high hurricane claims and problems in its London reinsurance business.

CIGNA said Friday it has completed its review of London property and casualty reinsurance business and is strengthening reserves for it. The result is a $140 million net charge.

The review covered the company's "London Market Excess" business, which is reinsurance that kicks in when claims exceed specified amounts. In reinsurance, companies give some of the risk of paying claims, along with some of their premiums, to other companies.

Besides the $140 million, CIGNA also reported charges of $61 million mainly reflecting settlement of claims disputes and losses on international bond and credit business. Problems in the international business reflect turmoil in the Scandinavian financial markets, company spokesman Michael J. Monroe said.

Also, third-quarter results will include charges of $57 million for Hurricane Andrew and $29 million for Hurricane Iniki, CIGNA said.

Partly offsetting the charges is a $182 million tax benefit from a settlement of audit issues for the tax years 1982 through 1987.

However, CIGNA still is disputing other tax issues for those years and a $180 million adjustment that the Internal Revenue Service has proposed that the company pay. CIGNA took the matter to court in September.

CIGNA would not comment on what its net realized capital gains will be for the third quarter, which ended Sept. 30. The company will report third-quarter results Nov. 2.